"Dot-Coms, Ostriches and Tulips"

Having lived through at least three stock market meltdowns—1962, 1987, and 2001---and the speculation in llama and ostrich farms, Beanie Babies, and, more recently, Internet start-up companies, I was not too surprised to learn that even tulips were, at one time, a source of speculation and greed.

In his book, “TulipoMania”, the author, Mike Dash, retells the fascinating story of the tulip frenzy that took place in Holland in the mid-1630’s. Originally grown in the gardens of the Turkish Sultans, tulips bulbs became a commodity of exchange between Asian and the European traders. In Europe, tulip bulbs were exchanged as gifts among the wealthy and educated classes. Eventually, the tulip became a source of unbelievable riches. Everyone in Holland—from priests and tavern keepers to poets and laundresses--- became involved in growing tulips for public auction. The price of specialty tulips rose to astronomical sums. For almost a year, in 1637, rare bulbs changed ownership for incredible and ever-increasing sums, until single bulbs were being sold for more than the cost of a house or a farm.

Dash, a Cambridge-educated historian, is a master storyteller who makes the story of futures trading come alive. The threat of economic bubbles is as relevant as ever. The “Tulipomania” is one of the first financial bubbles that is fully documented, from how it started, when it peaked and how it abruptly burst. Within two months, prices had collapsed. Fortunes were lost. Speculators became paupers. There were government inquiries (So, what’s new?). And, as usual, the poor suffered the most as jobs were lost and the nation slipped into a prolonged depression.

For a long while after the burst, the tulip was not a plant of choice for the Dutch gardener. A few stalwart growers planted them and standards in flower shape, size and color developed. Hybridization continued to produce new types of the flower.

I have been promising myself a trip to Pella, Iowa to attend the annual “Tulip Festival”. Each winter, I daydream about the tulip fields in bloom in Iowa and the streets and gardens awash in color. But, I’ve never made it to Pella. After reading this book, however, I’m going to make a concerted effort to get to the festival which will be held from the 6th to the 8th of May. While there, maybe I’ll buy a few bulbs for fall planting. The tulips I purchase will probably be exotic in coloration, but I won’t have to mortgage my house or sell my second son to purchase them as the Dutch did three hundred and fifty years ago.